Let the Budget Battle Begin

It was hard not to feel like a human ping pong ball listening the lead budget writer in the state senate, a Republican, state Sen. Andy Hill (R-45, Redmond), and the lead budget writer in the state house, a Democrat, state Rep. Ross Hunter (D-48, Medina), in their verbal volley at this week's revenue forecast announcement—a press conference that formally began this year's state budget standoff as the legislature starts to deal with the $1.3 billion shortfall and the $1.4 billion McCleary mandate to fund K-12 education.

State Sen. Andy Hill, courtesy Washington State Legislative Support Services

Belittling liberals' call for new revenue to deal with the funding problem, Hill said the state is taking in an additional $2 billion this biennium, $33 billion vs. $30.9 billion. Hunter says the state actually has greater obligations. Hill says spending more money on education doesn't guarantee better results. Hunter says spending more does improve results if you spend it on the right things, such as helping low-income kids.

The pair, the senate ways and means chair and house appropriations chair, respectively, were very polite about their match when they were at the same table—as they were, seated together in a house hearing room, during the Wednesday press conference. But get each of them solo on a follow-up phone call and the vicious serves begin.

Challenging the longstanding Republican talking point that governments need to budget like the Jones family and live within their means (i.e., ratchet back spending), Reo. Hunter zoomed in on increasing health care costs.

"It's bullshit," says Rep. Hunter in one ear. (Hunter was grousing about Hill's contention that what Democrats call "cuts" aren't actually cuts, but are simply smaller budgets than agencies have requested, like when the Department of Social and Health Services got $249 million less, or 4.3 percent less, than it requested in the 2011-13 budget. Hunter contends that the requests for more money reflect the increased cost of maintaining basic obligations such as the 106,000 more people that need to be covered by state health care without any expansion in the program.)

"You know, I kind of got lost when he [Hunter] started talking about his analogy with the grandmother and stuff," Hill says in the other ear. (Hill was dismissing Rep. Hunter's analogy about the increasing costs of government, pointing out that revenues are growing faster than population or inflation.)

Hunter's grandmother analogy cuts to the center of the two budget writers' debate.

Challenging the longstanding Republican talking point that governments need to budget like the Jones family at the kitchen table and live within their means (i.e., ratchet back spending), Hunter zoomed in on what everyone identifies as the biggest cost driver, health care costs. He said that when grandma moves in with the Joneses, they're facing the exact same kind of new costs that governments have to deal with.

His point: The size of the Medicare population is growing faster than the rest of the population at large right now which means that despite Hill's assertion about the $2 billion in additional revenue, costs are growing disproportionately to and faster than new revenue.

Hunter also specifically disputes the notion that there's an "additional" $2 billion coming in. He notes that the last budget included one time added resources totalling $1.2 billion, including the $101 million temporary beer tax and $378 million on one-time fund transfers. The last budget also included $986 million in temporary cuts, which make up nearly 40 percent of the new spending: $165 million in one-time cuts to K-12 teachers' salaries; $134 million in one-time higher education cuts such as three percent salary reductions; and $467 million in social service cuts such as a $27 million delay in home care worker training. Taking away the $1.2 billion in added resources this time, and restoring the $986 million in spending obligations, makes the additional $2 billion a wash, Hunter says.

And so, Hunter has consistently argued, as he did this week, that in order to meet the state's obligations and balance the budget, the state will need new revenue.

Hill, while telling PubliCola he's "not a Grover Noriquist ... I've never taken a pledge, I'm not one of these 'never ever raise taxes' guys," adds that new taxes don't seem viable politically; he cites recent voter thumbs downs to taxes such as a losing King County measure for criminal justice along with Democratic Gov. Jay Inslee's stand against new taxes. "It's going to end up with a red signature once it hits the governor's desk" he say,s if Hunter pushed taxes.

"To assume that we should grow at a linear rate with population I think is flawed."—Sen. Andy HillHill sticks to the notion that there's more money coming in than last biennium. "We actually have more money coming in to government. The question is how do we spend it?" Saying "we've been doling out money across the state," he explains that "money is necessary, but it's not sufficient. When we put that money in we better make sure that we're buying outcomes."

And Hill doesn't seem to find Hunter's emphasis on disproportionate health care costs compelling. "The amount of revenue coming in is beating inflation and population. Everyone thinks when you add one more person to the population our costs should go up by that small percentage ... well, there's economies of scale, there's productivity, so to assume that we should grow at a linear rate with population, I think is flawed."

Hill believes the way to deal with the shortfall is to budget wisely. "There is additional money, and it's really a matter of how we spend it."

Hill says education needs to be the top priority. "Education [spending] has grown at a slower rate in terms of percentage of the way we allocated versus other programs, and we should be flipping that right now. That's the reprioritization.."

(Human services funding actually fell as a percentage of the budget during the recession, going from $12 billion, or 37.8 percent of the 2007-09 budget, to $11 billion, or 35.8 percent of the 2009-11 budget. It got back to the 2007 level in the most recent 2011-13 budget at $12 billion, or 37.5 percent of the budget. And while K-12 funding has declined dramatically from previous decades, when it used to be at 50 percent, it has actually increased from $13.5 billion, or 40.5 percent of the budget in 2007-09, to about $13.7 billion, or 42.8 percent, in the last biennium. Meanwhile, the $10 billion in overall cuts since the recession have crippled the social safety net.)

Does Hill mean social services are going to take a hit in Hill's "reprioritized" budget?

Hill says: "[Social services] just don’t get as big a gain as I think they expected. And its not just social services. It's across the government. When we roll the budget out, you’ll see growth in practically every part of government. You’ll see a growth in spending, year over year. How can you talk about cuts if there more money that’s coming in?"

While disagreeing with Hunter's analogy about grandma, Hill has an analogy of his own, about his daughter. Hill uses the analogy to emphasize his point that the government isn't actually making cuts, it's just not increasing spending as much as some would like.

His teenaged daughter, he says, wants him to increase her weekly car allowance for driving to school, say, from $25 to $100, but he only raises it to $30. In her mind, she just took a $70 cut, but in reality, Hill says, he gave her a $5 increase.

(To keep services at current levels, the 2013-15 budget, running a $900 million deficit, represents an 8.7 percent increase—as opposed to Hill's daughter's request for a 300 percent increase or to the 20 percent increase he gave her.)

"We've got an accounting system to figure out the cost of driving to school. And it may cost more than it did last year. You reduce that increase and she can't drive to school [one day per week]. That's a cut."—Rep. Ross Hunter

Hill, however, doesn't intend the analgoy to be taken literally (kind of a problem when your debating the meaning of every zero and decimal point.) His point, though, is that government spending is going up despite outcries about cuts.

But just as Hill wasn't buying Hunter's analogy about grandma, Hunter isn't buying Hill's analogy about his daughter.

Hunter reenvisions the car drama ending with Hill's daughter, facing the reality of higher gas prices, saying she can't drive to school five days a week anymore: "Hey, dad, now I'm taking Fridays off. How do you like that?"

"The cut isn't measured in dollars," says Hunter. "The real question is can she actually get to school? [With Hill's] example of your daughter wanting a whole lot more and you don't give it to her, and she says it's a cut, he's trying to say that's a cut on an increase. Well, we've got an accounting system to figure out what the cost of driving to school is every day, and it may cost more than it did last year. You reduce that increase—and now she can't drive to school on Fridays. That's a cut."

Let the budget battles begin. But I'm giving neither Hill nor Hunter the last word here. My question is for both of these suburban Seattle legislators: Why don't you make your kids take the bus to school?

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